The Hanjin Group said in a statement Tuesday that it will provide its stakes in overseas terminals, such as the one Hanjin operates in Long Beach, California, as collateral to borrow 60 billion won ($54 million).
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As parent Hanjin Group and the South Korean government consider steps to salvage the shipping company, retailers in the U.S. have called for measures to help temper losses.
This potential bankruptcy, which would mark the largest failure of a container shipper in history, stranded 45 ships at sea, as the company is concerned that creditors would seize the cargo if the ships docked (as has happened in Singapore and some ports in China).
However, the shipping company’s parent, Hanjin Group, has pledged to raise 100bn won ($90m) – although there are doubts as to whether that would be enough to cover the cost of unloading cargo.
With Hanjin’s future in doubt, carriers have announced they will hike container freight rates by as much as 50 percent beginning next month as retailers scramble to secure shipping ahead of the peak year-end holiday season, industry sources said.
Finance Minister Yoo Il-ho said Wednesday that the cargo crisis caused by Hanjin’s slide toward bankruptcy will begin to ease this week.
Members of Congress and USA retailers have also sought support for Hanjin to temper the repercussions of the shipper’s dilemma.
A Korea Development Bank spokesman said he is checking whether the bank has received the court’s request. That’s created a freakish situation on the high seas for 85 Hanjin ships that have been effectively marooned offshore as ports in the U.S., Asia and Europe have turned the company’s ships away.
And it’s not the only tech company caught up in the Hanjin mess.
Hanjin’s collapse could wreak havoc on port operations and shipping lines over the next two to three months and could impact trade between the United States and South Korea, the U.S. Department of Agriculture said in a report published on Thursday. The port said the railway had agreed to move the containers coming off the ship.
He says the shipping company sought Chapter 15 bankruptcy protection in the US – and was granted permission by a bankruptcy court, which means it could soon be able to dock its ships here. Workers can’t unload the cargo because they are not sure they will be paid. A US federal judge has temporarily granted Hanjin’s request for protection from its creditors and scheduled a hearing for Friday.
Hanjin shares jumped 30 percent on Tuesday after its group company and the government sought to provide additional funding to limit disruptions.
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Under the intensifying pressure to shoulder unpaid unloading fees, Hanjin Group on Tuesday made a decision to raise 100 billion won, including 40 billion won of group chairman Cho Yang-ho’s private assets, to cover the urgent expenses to help its stranded ships land and discharge cargo.
